UK House Prices Up 7.1% Year-on-Year, New Figures from Nationwide Suggest

The latest figures from Nationwide suggest that not only is the UK housing market bouncing back, but demand for homes in key areas of the country is higher than it has been in some time.

Over the course of the past year, average UK property prices have increased by as much as 7.1%. Nationwide’s newly published report subsequently suggests that UK house prices are now averaging £238,831, up almost £16,000 from the same period last year.

Analysts have labelled the events of the past 12 months a double-edged sword of sorts for prospective buyers. Many first-time buyers amassed significant savings during lockdown, enabling them to more comfortably cover deposit requirements on planned purchases. But at the same time, a growing lack of affordable properties is seeing prices rapidly increase.

Speaking on behalf of James Pendleton estate agents, Lucy Pendleton commented on what could prove to be an extraordinary few months for the UK housing market.

“This market is on the boil,” she said.

“Silly season might be just around the corner. That’s when a seller’s market becomes entrenched against a backdrop of very high demand, and you start to see open houses for properties that are nothing special and a return of gazumping.”

A steep monthly rise in house prices

The figures published by Nationwide also showed a significant spike in property prices between March and April, increasing a further 2.1%. The pace at which property prices are increasing has accelerated over the course of the last year, driven partially by the stamp duty holiday extension in England, Wales, and Northern Ireland.

In addition, movers and first-time buyers across the country are setting their sights on more spacious homes away from busy urban centres.

Robert Gardner, chief economist at Nationwide, believes that this may be an even bigger motivator than the stamp duty savings available for those who act fast.

“Our research suggests that while the stamp duty holiday is impacting the timing of housing transactions, for most people, it is not the key motivating factor prompting them to move in the first place,” he said.

Analysts expect average house prices to continue growing for the foreseeable future, putting a further drain on the already limited supply of affordable homes available. This is unlikely to come as welcome news for first-time buyers, but the reintroduction of the 95% LTV mortgage could help thousands take their first step on the property ladder.

“The fact that around a third of first-time buyers in England in 2018-19 said that friends or family helped them to raise a deposit through a loan or gift suggests that the recent surge in savings will help some, but that the impact won’t be spread evenly,” Mr. Gardner commented.

He also highlighted the possibility of a significant slowdown later in the year if unemployment projections for Q3 and Q4 prove accurate.